November 23, 2022

Succession or Secession

The Unique Test of Faith-Driven Stewardship

— by Paul Michalski

“Just about anybody can make an organization look good for a moment, but the best leaders lead today with tomorrow in mind.” (John Maxwell)

The idea that a business leader should see herself as a “steward” of a business is not a new idea, and its not even a uniquely Christian idea.  The U.S. Chamber of Commerce Foundation gives a “Best Corporate Steward” award.  They describe it in terms of “a company that conducts its business in a way that creates ‘shared value’.”

But the “stewardship” demanded of faith-driven business leaders is profoundly different than the “stewardship” urged by the world.  The world essentially sees stewardship as being a “good owner”.  God commands being a “steward” instead of an “owner”.

Although the operational stewardship that would earn a U.S. Chamber of Commerce award and the operational stewardship that would honor God’s command might look very similar in practice, there is a test of stewardship that is uniquely faith-driven.  It is the exercise of stewardship (or a default to ownership) when a leader decides to step down or step out.

The world says “be a good steward while you own it, get the most money you can at exit, and let the next leader worry about winning the stewardship award” because the world’s version of stewardship is about being a good ”owner” while you own it. I believe the Bible requires stewardship not only in the operation of a business but also in the “hand-off” of the business, because the faith-driven leader never owned it.

The Biblical Basis for “Stewardship”

The Bible is full of passages reminding us that God owns everything.  For example, Psalm 50:12 (“For the world and its fullness are mine“) and Deuteronomy 10:14 (“Behold, to the Lord your God belong heaven and the heaven of heavens, the earth with all that is in it“),  Perhaps the most direct when it comes to wealth is Haggai 2:8:  “The silver is mine, and the gold is mine, declares the Lord of hosts.”

But God didn’t just plop all of creation here without direction or purpose for His greatest creation–humans.  In Genesis 1:28, God gave what I will call the Creation Mandate (what some also refer to as the Cultural Mandate):

And God said to them, “Be fruitful and multiply and fill the earth and subdue it, and have dominion over the fish of the sea and over the birds of the heavens and over every living thing that moves on the earth.

We are not just another species of animal created to co-exist alongside all others.  We are different and were given a commandment about our purpose on earth.  We are to “have dominion“.

Although that term sounds ominous and, on its face, seems to hold the potential to justify abusing the earth and its creation, theologians (which I do not claim to be) seem to be pretty confident that the term means “stewardship”.  We are to care for God’s creation as its stewards.

In case you were wondering how God owning “creation” relates to the business YOU started, organizations are CREATIONS that become part of God’s creation.   The Creation Mandate extends beyond merely putting together raw physical materials.  It includes “subduing” through the creation of culture and social structures such as organizations.

The Final Test of Stewardship: Succession or Secession

There are really only two basic choices when a leader who has shaped the purpose, values and culture of an organization no longer wants, or is no longer able, to continue to lead the organization—succession or secession.  But I am not talking about who fills the leader’s seat—I am talking about what happens to the HEART of the organization—its real WHY.

One only needs to watch a few episodes of the television series Succession or Yellowstone to see the difficulties and drama that can arise when a strong leader who has shaped a business realizes it needs to pass to the next generation.  The difficulties and drama are as old as King Solomon:

I hated all my toil in which I toil under the sun, seeing that I must leave it to the man who will come after me, and who knows whether he will be wise or a fool? Yet he will be master of all for which I toiled and used my wisdom under the sun. (Ecclesiastes 2:18-19)

Merriam-Webster has these definitions most relevant for our discussion:

• Succession:  the continuance of corporate personality.

• Secession: formal withdrawal from an organization.

In talking about the options for the heart of the organization, this is what I mean by succession and secession.

• Succession of heart: The leader passes leadership to a person or group of persons who share the leader’s commitment to the heart of the organization and are likely to be intentional about continuing to cultivate, curate and protect that heart.  The heart continues.

• Secession of heart: The leader passes leadership to a person or group of persons who do not share the leader’s commitment to the heart of the organization and are unlikely to prioritize preserving that heart and may even take steps to change the heart of the organization.  The heart is withdrawn.

In speaking about legacy, John Maxwell writes:

Just about anybody can make an organization look good for a moment, but the best leaders lead today with tomorrow in mind. . . . Because a leader’s lasting value is measured by succession.

And the Bible suggests another potential legacy path:

Truly, truly, I say to you, unless a grain of wheat falls into the earth and dies, it remains alone; but if it dies, it bears much fruit. (John 12:24)

The Succession Option

Succession of heart is even more difficult than succession of a leader.

Succession of heart can be accomplished in a number of ways, but it requires intentionality.  Here are some examples:

A Succession Person: The simplest example of heart succession is finding a new leader who shares a commitment to the heart of the organization.  This might be a person groomed in the organization to take over under the same ownership or someone in the next generation who shares that commitment in a family business.  It is much more difficult if the leadership transition is accompanied by an ownership change.

A Succession Buyer: In a sale to a third-party, succession of heart would mean finding a buyer with that commitment. There are private equity firms whose stated business model is preserving the culture of the organizations they acquire (although it is unclear whether they would honor a faith-driven heart that is aligned with Biblical beliefs, principles and priorities) and even a few (e.g., Sovereign’s Capital) committed to Biblically faithful leadership. If a leader/owner wishes to sell and is unable to find a third-party buyer committed to preserving the organization’s heart, it might be possible to arrange a full or even partial sale to the existing management group or employees (e.g., using an ESOP, which has a number of very interesting “stewardship” benefits) who have helped cultivate and maintain, and who value, the organization’s heart.

A Succession Contract: Contractually maintaining an organization’s heart following a sale is quite unusual but not unprecedented. The ongoing tension between Unilever and its Ben & Jerry’s subsidiary has been in the news recently.  When the founders of Ben & Jerry’s sold the business to Unilever, they insisted upon quite elaborate contractual provisions designed to preserve the unique culture of Ben & Jerry’s even while under the ownership of Unilever, including maintaining a subsidiary board outside Unilever’s control.

Of course, succession of heart works only for so long as those taking over continue to prioritize maintenance of the organization’s heart, not only while they are leading the organization but also upon the next change in leadership. Even private equity firms that are committed to preserving culture generally only hold that commitment during the 3-5-year period after which their commitment shifts to exiting the investment at the best price for their investors.

The Secession Option

Secession of heart is just as easy as succession of heart is difficult.

Because the current of the world flows toward “ownership” and the world’s priorities (i.e., business as usual) rather than faith-driven stewardship, leadership transition without a commitment to preserve the organization’s heart will likely (or almost certainly) lead to secession of that heart—particularly a heart of faithful leadership in alignment with Biblical beliefs, principles and priorities.

Here are a few ways it can occur:

A Secession Leader. Leadership transition to a person who lacks a commitment to the organization’s heart will lead to the erosion (or purposeful elimination) of that heart. One example is ServiceMaster, which was famously known for including “honoring God” in its mission statement and having a statue in front of its headquarters of Jesus washing feet. Bill Pollard was a successor leader committed to succession of the heart of the organization cultivated by its founder.  As Darrell Cosden writes in a paper titled Honoring God and Developing People: ServiceMaster, Bill Pollard and the Heart of the Corporation:

After Pollard’s exit from ServiceMaster God functionally became a much vaguer concept, and ultimately irrelevant to the business goals. . . . When utility reigns supreme, it is not a huge leap to conclude that profit really is the ultimate end goal, and people as well as God/faith can be a part of the means to that end pragmatically, even if optionally. This however is a complete undoing of the entire history, ethos and institutional identity of ServiceMaster.

The Bible is rife with examples of faithful kings and prophets being followed by unfaithful successors.  For example, one only needs to read the story of Hezekiah and his son Manasseh in the Book of Kings to see how quickly a faithful legacy can be unwound.

And [Manasseh] did what was evil in the sight of the Lord . . . .  For he rebuilt the high places that Hezekiah his father had destroyed, and he erected altars for Baal and made an Asherah, as Ahab king of Israel had done . . . .” (2 Kings 21:2-3)

A Secession Buyer.  There are numerous examples of a faith-inspired heart of an organization disappearing following a sale to a business as usual buyer. You can read about companies with overtly faith-inspired mission statements and values only to go to their websites to find no trace of that heart. A little digging on the Wayback Machine website archive reveals when the website changed.  A little more digging online reveals a sale of the company shortly before the change.

A Secession Financing.  Taking a business public is a financing step (either financing for the company in a primary offering or an exit financing for owners in a secondary offering) toward secession of heart because ownership and control of a public company is always open to the highest bidder unless intentional steps are taken to preserve control in the hands of successor of heart owners.  For example, Coca-Cola Bottling Co. Consolidated, the largest independent Coke bottler in the United States, is listed on NASDAQ but the founding Harrison family retained voting control through a separate class of common stock.  Coca-Cola Bottling Co. Consolidated is a unique example of a public company that has been able to retain its overtly faithful heart because of the intentionality of its owners.

Succession or Secession: Which Is Better Stewardship?

You might be thinking, “Succession of heart is obviously better faith-driven stewardship than secession of heart“.  Well, not necessarily.

It is easy to idolize succession of heart–pridefully wanting to preserve a faithful legacy–when God might have a different plan.  Yes, as a general matter succession of heart is more often a better path of faith-driven stewardship than secession of heart, but succession can be poor stewardship!

I talk about the heart of an organization, but an organization doesn’t really have a heart.  An organization (including a business) is a platform that facilitates humans working together in relationship.   Those people have hearts about work, and the expression of those hearts forms the culture of the organization.

As part of creation, an organization belongs to God (just like everything else) and God’s plan may be for that particular platform to exist for only a season.  The job of a faithful-driven leader is to steward the organization in a manner consistent with the Creation Mandate, maximizing the flourishing of God’s creation.  In a broken world, the best stewardship of a particular organization at a moment in time might be secession of heart–it might be to allow the “grain of wheat” to die so that God can use it to bear “much fruit”.  For example:

If the hearts of the humans who have been working in the organization have been transformed to desire and pursue business in alignment with Biblical beliefs, principles and priorities rather than business as usual, God’s desire may be to lead those people out of the organization and sprinkle their hearts to transform the cultures of many other organizations.

If secession of heart yields the greatest economic value for an organization (e.g., selling at the highest price to a Secession Buyer), God’s desire may be for the faith-driven owners to extract that worldly value and steward it in ways that have an even greater positive impact on the flourishing of God’s creation.  Recall God’s command to the Israelites when they were leaving Egypt:

When he lets you go, he will drive you away completely. Speak now in the hearing of the people, that they ask, every man of his neighbor and every woman of her neighbor, for silver and gold jewelry. (Exodus 11:1-2)

Of course, choosing succession of heart or secession of heart requires prayerful discernment (ideally with trusted friends and counsel)–it must be intentional.   Just as it is easy to idolize succession of heart (and pridefully pursuing legacy), it is even easier to rationalize secession of heart (and selling to the highest bidder).

For example, transferring the business to an ESOP might be more complicated and might be less lucrative at closing than selling to a private equity firm, but it might be better faith-driven stewardship of what God owns.

It is not about what looks good to people who share our faith or what makes us feel good–it is about seeking God’s will.   In his book Why Business Matters to God, Jeff Van Duzer reminds us:

The same God who calls us to [fulfill the creation and redemption mandates in business] provides us with access to the discernment and power that will enable us to fulfill them.

This article first appeared in the Faith Driven Entrepreneur Blog, published by Faith Driven Entrepreneur


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